The authorities are probing whether the former management of the public pharmacy institution “Montefarm” engaged in criminal activities under the jurisdiction of the Special State Prosecutor’s Office (SDT) by entering into a covert 10-year agreement with a private firm, which lacks the right for termination.

As reported by “Vijesti,” a special police unit conducted a documentation seizure last week from “Montefarm” regarding this deal, which includes the disputed contract initiated with the company “Mediamarketing” based in Podgorica, wherein the public institution agreed to allocate 85 percent of its advertising income from pharmacies to this company.

The SDT verified to “Vijesti” that the Special Police Department (SPO) is undertaking certain police measures and actions aimed at determining the validity of the suspicion that a criminal offense under its jurisdiction occurred at the Public Institution of the Pharmacy of Montenegro, “Montefarm”.

“To ensure further action in the ongoing investigation under binding orders and direct oversight of the Special State Prosecutor’s Office, no further information can be disclosed due to procedural considerations,” the SDT stated in response to “Vijesti”.

“Montefarm” briefly remarked that the SPO had recently visited the institution and requested specific documentation, stating their inability to comment on the details due to the ongoing investigation’s confidentiality.

Did you fund the LED display installation up front?

The agreement for the deployment of smart LED displays and hologram projectors across 56 state pharmacies was signed in April 2023 by former “Montefarm” director Goran Marinović with the private company “Mediamarketing” from Podgorica.

According to the Central Register of Business Entities (CRPS), this firm was established in January of the same year, with a nominal capital of one euro and a workforce of just one individual.

As reported by “Vijesti,” “Montefarm” agreed to remit a deposit of 60 euros to the company within 30 days of the contract signing, serving as assurance for performing the contract or compensating for any potential damage to the display and hologram. Concurrently, the private company committed to providing delivery, installation, and full operational capability of the LED displays and holograms within a 60-day window.

The contract stipulates a duration of five plus five years, during which “Montefarm” would retain a fixed fee of 15 percent of the monthly revenue generated. Under the terms outlined in the agreement, the remaining 85 percent from all advertising endeavors is to be paid to the private company no later than the 5th of the month following the previous month’s earnings.

In case of termination, they receive ten years of income

On behalf of “Montefarm,” Marinović entered into an agreement with the director of “Mediamarketing,” defining the terms of the contract and related implementation details as confidential business information. Disclosure to the public or unauthorized third parties is prohibited without mutual written consent, except when requested by a competent authority or during legal proceedings.

A stipulation was included whereby “Montefarm” relinquished any statutory rights it may have had to terminate the contract before the end of the agreed term or to seek any reduction in its obligations. Should “Montefarm” unilaterally terminate the contract, it would owe the private firm compensation calculated as 85 percent of the monthly income generated from the commencement of the LED display and hologram up to the termination date, multiplied by the number of months remaining in the 10-year term. In the contrary scenario, per the contract, the private company would compensate “Montefarm” with 15 percent of the monthly revenue multiplied by the remaining months until the contract’s end.

Advertising monopoly, revenue 70,000

Approximately fifteen pharmaceutical companies have been advertising in state pharmacies across Montenegro since December 2023. Sources indicate that “Mediamarketing” has likely accrued around 70,000 euros from advertising to date, whereas the public pharmacy institution has reportedly generated approximately 12,000 euros, excluding VAT. “Vijesti” has informally learned that some prominent pharmaceutical companies have invested as much as 20,000 euros for advertising in state pharmacies.

The contract, to which Vijesti gained access, outlines that any form of printed marketing and advertising material placement will be strictly prohibited in all pharmacies from the signing date onwards. “Montefarm” assumes full responsibility for ensuring that no other marketing tools will be employed throughout the agreement’s duration with “Mediamarketing.”

Former director Marinović was dismissed by the Minister of Health in April of last year. Vojislav Šimun succeeded him, appointing Aleksandar Bogavac as the new director. This dismissal followed findings from the Commission for the Control of the Work of Health Institutions, which concluded that Marinović acted unlawfully, a claim he has denied.

The report from the commission also raised concerns regarding Marinović’s signing of multiple contracts for utilizing the smart LED displays and 3D holograms, despite the institution’s Statute not permitting the advertisement of pharmaceutical products without proper authorization.

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